September 21st, 2011 by Alex

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September 15th, 2011 by Alex

August 28th, 2011 by Alex

This is a cool, dramatic narration, attempting to make the case for buying physical silver ASAP.

Just consider this: Alan Greenspan admittedly doesn’t think gold is in a bubble. “Gold, unlike all other commodities, is a currency,” Alan Greenspan said recently. “And the major thrust in the demand for gold is not for jewelry. It’s not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating.”

August 18th, 2011 by Alex

If you think gold at $1800 and silver at $40 is expensive, this excellent presentation may change your mind. I just wish that when this bull market in precious metals started I wasn’t a moneyless college kid. Oh well. Nonetheless, in due time, current precious metal prices could too easily seem cheap.

July 18th, 2011 by Alex

All this talk about the government defaulting on its debt if the debt ceiling isn’t raised is a farce. It’s just like all the dire whining Wall Street and Wall Street pandering politicians did during the 2008 credit crisis to postpone the country from taking the medicine needed to actually fix the problem. Now the government and business interests dependent on government spending are whining for a bailout so they can once again postpone taking medicine. Bailouts don’t solve the problem, which is debt.

Even if the debt ceiling isn’t raised, the U.S. will only default on August 2 if it chooses to do so (according to guys like Lindsey Williams, the plan is to eventually default but perhaps not quite yet). Saying that not raising the debt ceiling means immediate default is saying that U.S. bond holders are the lowest on the economic priority list of the U.S. government. I don’t believe that is the case, because, if that were the case, I don’t know who would want to buy U.S. debt. There is a lot of spending to cut before there is no choice but to default.

The U.S. has defaulted before in 1971, when the gold standard was finally completely abandoned. The result was inflation. But default would be different this time since the scheme used to keep the debt pyramid scheme going would be without a new scheme. I hear people suggesting the dollar would collapse in value in a default scenario, but I doubt it unless the government purposely made all the moves necessary to destroy the dollar. Overall, raising the debt ceiling makes the dollar a bigger joke than toying with default. There is a lot to default on domestically (like military spending and medicare) and a lot of taxation that can be implemented before a full default on debt needs to be made.

The only thing not raising the debt ceiling would really mean immediately is that the government would have to shrink itself in order to not default, which it will have to do eventually anyway (unless it wants to opt out of the debt monetary system sometime soon). We’d see deflationary forces take hold rather than inflationary forces due to a scarcity of money — since the money in our monetary system comes from ever-growing debt. Deflationary forces would be good in the long run, because deflation is economic medicine in the current system. The sooner the country takes that medicine, the better off we’ll all be in the long run. And as a young guy, I happen to be most interested in the long run, not the next election cycle or the next government check (since I don’t get any).

There is very little chance that the debt ceiling won’t be raised in some way. Washington pretty much never has the guts to do the right thing, unless the right thing is part of some kind of conspiracy making it not really the right thing. The right thing is technically monetary reform, but not raising the debt ceiling is at least more the right thing than continuing the debt pyramid scheme known as the modern monetary system. Back when Obama was cool, he actually voted against raising the debt ceiling. But now that he’s at the helm, he just wants to make the status quo move.

The problem with the national debt is not in paying it off. Paying off the debt would mean shrinking the money supply, because the national debt represents the base money supply of the country. Thus, that is never really going to happen. The real problem with the national debt is that it is the driver of inflation. It drives inflation on two interrelated fronts. Since debt comes with interest, the money to pay the interest requires more debt (hence why the debt ceiling needs raised). More debt means more money in the system and more money in the system, beyond what real economic growth can absorb, means the eroding of the purchasing power of the dollar and thus inflation. That’s how the debt pyramid scheme that passes for the modern monetary system works.

Unless the U.S. starts running some kind of massive export surplus, or the Fed starts monetizing the U.S debt to make it interest free, real default is mathematically inevitable without deep spending cuts or more debt. Because if the pyramid scheme doesn’t grow, a deflationary spiral develops due to interest. Conversely, if the pyramid scheme continues to grow, the inflationary spiral that started with the birth of the Federal Reserve will continue until interest rates get too high to keep it going leading to hyper-inflation.

The current out of control government spending in the U.S. in the name of propping up the debt economy, is just a symptom of using inflation as a tax, rather than using actual direct taxation. Inflation is what they are currently using to fund government, avoid economic medicine, and basically buy votes from an economically unsophisticated public that doesn’t understand why gold hit $1600 an ounce. Without a monetary system that allows for inflation, the government would have to stay honest with its spending. Neither the democrats, who serve as the minions to the corporate welfare state, nor the republicans, who serve as the minions to the corporate warfare state, want to give up inflation. If they did, they’d all be talking about monetary reform right now instead of simply trying to extort each other in order to keep the pyramid scheme going. The fact that they aren’t even talking about cutting military spending is probably a sign that more war is in the cards. Perhaps it’s bye bye dollar and hello Petrodollar that is in the works.

Check out this video by Bill Still on the Debt Ceiling debate.

June 8th, 2011 by Alex

June 8th, 2011 by Alex